Simmons Reports First Quarter 2019 Earnings

32 Days ago

PINE BLUFF, Ark., April 22, 2019 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) today announced net income of $47.7 million for the quarter ended March 31, 2019, compared to $51.3 million for the same period in 2018, a decrease of $3.6 million, or 7.1%. Diluted earnings per share were $0.51, a decrease of $0.04, or 7.3%, from the same period in 2018. Included in first quarter 2019 results was $1.4 million in net after-tax merger-related, early retirement program and branch right-sizing costs.

Excluding the impact of these items, core earnings were $49.1 million for the quarter ended March 31, 2019, compared to $52.6 million for the quarter ended March 31, 2018, a decrease of $3.5 million, or 6.7%. Core diluted earnings per share were $0.53, a decrease of $0.04, or 7.0%, from the same period in 2018.

“We had solid operating results in the first quarter. Revenue was affected by three significant items compared to the first quarter of 2018. Accretion income was down $4.6 million; debit card interchange income, primarily as a result of the Durbin rate cap, was down $2.8 million; and the gain on sale of securities was up $2.7 million, resulting in a net decrease of $4.7 million from the previous year,” said George A. Makris Jr., Chairman and CEO.

Makris continued, “We would also like to welcome our newest customers and associates from the Reliance Bank merger into the Simmons family. We closed the transaction Friday, April 12, 2019, and performed the systems conversion over that weekend. We are excited about our growth opportunities in the St. Louis market due to our increased presence.”

Selected Highlights:

1st QTR 2019

4th QTR 2018

1st QTR 2018

Net income

$47.7 million

$55.6 million

$51.3 million

Diluted earnings per share

$0.51

$0.60

$0.55

Return on avg assets

1.19%

1.35%

1.38%

Return on avg common equity

8.60%

9.98%

9.90%

Return on tangible common equity

15.34%

17.96%

18.77%

Core earnings(1)

$49.1 million

$56.5 million

$52.6 million

Diluted core earnings per share(1)

$0.53

$0.61

$0.57

Core return on avg assets(1)

1.22%

1.37%

1.41%

Core return on avg common equity(1)

8.85%

10.13%

10.15%

Core return on tangible common equity(1)

15.76%

18.21%

19.23%

Efficiency ratio(2)

56.76%

51.99%

53.24%

Core earnings excludes non-core items, and is a non-GAAP measurement.

Efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.

Loans

(In billions)

1st Qtr 2019

4th Qtr 2018

1st Qtr 2018

Total loans

$11.7

$11.7

$11.0

Legacy loans (excludes loans acquired)

$8.7

$8.4

$6.3

Loans acquired

$3.0

$3.3

$4.7

Total loans, including those acquired, were $11.7 billion at March 31, 2019 an increase of $753.4 million, or 6.9%, compared to $11.0 billion at March 31, 2018. On a linked-quarter basis (March 31, 2019 compared to December 31, 2018), total loans remained flat at $11.7 billion. The seasonal decrease in the credit card and agricultural portfolios was $40.4 million. Loans approved and ready to close totaled $473.3 million at March 31, 2019 compared to $277.5 million as of year-end. “Based on our current loan pipeline, we estimate loan growth in the 5% range for 2019,” said Makris.

Deposits

(In billions)

1st Qtr 2019

4th Qtr 2018

1st Qtr 2018

Total deposits

$12.0

$12.4

$11.7

Non-time deposits

$9.3

$9.5

$9.5

Time deposits

$2.7

$2.9

$2.2

Total deposits were $12.0 billion at March 31, 2019, an increase of $332.6 million, or 2.9%, since March 31, 2018. Total deposits decreased $409.2 million, or 3.3%, compared to December 31, 2018. During the quarter, brokered and public fund deposits decreased $557.2 million while core deposits increased $148.0 million. “Our cash balance was reduced as we eliminated some high cost deposits. We are very pleased with our growth in core deposits as we continue to emphasize relationship banking,” said Makris.

The Company’s net interest income for the first quarter of 2019 was $137.0 million, an increase of $2.1 million, or 1.5%, from the same period of 2018. Included in interest income was the yield accretion recognized on loans acquired of $6.7 million and $11.3 million for the first quarters of 2019 and 2018, respectively.

Net interest margin was 3.85% for the quarter ended March 31, 2019, a 9 basis point increase from the fourth quarter 2018. The Company’s core net interest margin, excluding the accretion, was 3.67% for the first quarter of 2019, a 1 basis point increase from the fourth quarter of 2018. Cost of interest bearing deposits was 1.31% for the first quarter of 2019, an 11 basis point increase from prior quarter.

Non-Interest Income

Non-interest income for the first quarter of 2019 was $33.8 million, a decrease of $3.8 million compared to the same period in the previous year. The decrease was primarily due to reductions in debit card fees and mortgage and SBA lending premium income. The interchange rate cap as established by the Durbin amendment became effective for the Company July 1, 2018, resulting in a $2.8 million reduction in debit card fees when compared to the first quarter of last year.

Mortgage and SBA lending premium income decreased $1.1 million when compared to the same quarter in 2018. Mortgage lending income during the first quarter of 2019 was lower by $649,000 compared to 2018 and SBA premium income decreased by $476,000 due to fewer loan sales in the current quarter compared to the first quarter of 2018.

During the first quarter, the Company sold approximately $197 million in securities which resulted in a gain of $2.7 million, as part of a bond portfolio analysis of expected cash flow changes.

Non-Interest Expense

Non-interest expense for the first quarter of 2019 was $101.4 million, an increase of $3.3 million compared to the first quarter of 2018. Included in this quarter were $1.9 million of pre-tax merger-related, early retirement program and branch right-sizing costs. Excluding these expenses, core non-interest expense was $99.5 million for the first quarter of 2019, an increase of $3.2 million compared to the same period in 2018. Software and technology costs increased approximately $1.8 million over the same period in the prior year. The Company’s Next Generation Banking technology initiative is progressing on schedule and the incremental IT expenditures during the first quarter were primarily related to this initiative.

During the first quarter, the Company offered qualifying associates an early retirement option resulting in $355,000 of non-core expense. The Company projects an additional $2.5 million of expense related to these retirements in the second quarter of 2019 and expects ongoing net savings of approximately $4.4 million beginning in the third quarter of 2019.

The efficiency ratio for the first quarter of 2019 was 56.76% compared to 53.24% for the same period in 2018.

Asset Quality

1st Qtr 2019

4th Qtr 2018

3rd Qtr 2018

2nd Qtr 2018

1st Qtr 2018

Allowance for loan losses to total loans

0.68%

0.67%

0.68%

0.73%

0.75%

Allowance for loan losses to non-performing loans

97%

164%

136%

115%

99%

Non-performing loans to total loans

0.70%

0.41%

0.50%

0.63%

0.76%

Net charge-off ratio (annualized)

0.20%

0.35%

0.36%

0.17%

0.24%

- Net charge-off ratio excluding loan sale

0.12%

All loans acquired are recorded at their discounted net present value; therefore, they are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

At March 31, 2019, the allowance for loan losses for legacy loans was $59.2 million. The allowance for loan losses for loans acquired was $1.3 million and the acquired loan discount credit mark was $42.4 million. The allowances for loan losses and credit marks provide a total of $103.0 million of coverage, which equates to a total coverage ratio of 0.87% of gross loans. The ratio of credit mark and related allowance to loans acquired was 1.41%.

During the quarter, the Company identified loans specific to the acquired portfolio of Bank SNB’s Dallas market which were poorly structured or were poorly managed post-funding, and were primarily linked to an individual lender. As a result, the Company made a provision for acquired loans of $2.0 million related to the Bank SNB acquired pool of loans.

Makris stated, “We have carefully reviewed these loans for potential losses and believe we have adequately identified any risk associated with the loans. Unfortunately, based on purchase accounting rules, the credit mark associated with the declining Bank SNB acquired pool is a standalone amount not related to Simmons’ overall allowance for loan losses and must be managed specific to that pool of loans.”

Provision for loan losses for the first quarter of 2019 was $9.3 million, essentially flat when compared to March 31, 2018 and $335,000 less than the fourth quarter of 2018.

Foreclosed Assets and Other Real Estate Owned

At March 31, 2019, foreclosed assets and other real estate owned were $19.0 million, a decrease of $10.2 million, or 35.0%, compared to the same period in 2018 and a decrease of $6.6 million, or 25.9% from December 31, 2018. The composition of these assets is divided into three types:

($ in millions)

1st Qtr 2019

4th Qtr 2018

3rd Qtr 2018

2nd Qtr 2018

1st Qtr 2018

Closed bank branches, branch sites & associate relocation

$7.6

$8.0

$9.6

$7.2

$8.1

Foreclosed assets - acquired

$6.2

$11.5

$8.0

$13.2

$14.9

Foreclosed assets - legacy

$5.2

$6.1

$5.1

$10.1

$6.1

Capital

1st Qtr 2019

4th Qtr 2018

3rd Qtr 2018

2nd Qtr 2018

1st Qtr 2018

Stockholders’ equity to total assets

14.3%

13.6%

13.4%

13.3%

13.5%

Tangible common equity to tangible assets

9.0%

8.4%

8.1%

7.9%

7.9%

Regulatory tier 1 leverage ratio

9.1%

8.8%

8.7%

8.6%

8.6%

Regulatory total risk-based capital ratio

13.6%

13.3%

13.1%

13.7%

14.1%

At March 31, 2019, common stockholders' equity was $2.3 billion. Book value per share was $24.87 and tangible book value per share was $14.78 at March 31, 2019, compared to $22.86 and $12.62, respectively, at March 31, 2018.

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total assets of approximately $16.1 billion as of March 31, 2019, conducting financial operations in Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock trades on the NASDAQ Market under the symbol “SFNC.”

Conference Call

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT on Tuesday, April 23, 2019. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 4557809. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP). The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance. These measures typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant non-core activities or nonrecurring transactions. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.

Forward-Looking Statements

Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, allowance for loan losses, and the effect of certain new accounting standards on Simmons’ financial statements. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, information technology affecting the financial industry, and the Company’s ability to manage and successfully integrate its mergers and acquisitions could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Simmons First National Corporation’s financial results is included in its Form 10-K for the year ended December 31, 2018, which has been filed with, and is available from, the Securities and Exchange Commission.

FOR MORE INFORMATION CONTACT:Stephen C. MassanelliEVP, Chief Administrative Officer and Investor Relations OfficerSimmons First National Corporationsteve.massanelli@simmonsbank.com

Simmons First National Corporation

SFNC

Consolidated End of Period Balance Sheets

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2019

2018

2018

2018

2018

($ in thousands)

ASSETS

Cash and non-interest bearing balances due from banks

$

151,112

$

171,792

$

125,231

$

162,567

$

170,811

Interest bearing balances due from banks and federal funds sold

340,049

661,666

388,573

781,279

688,853

Cash and cash equivalents

491,161

833,458

513,804

943,846

859,664

Interest bearing balances due from banks - time

4,684

4,934

3,954

2,974

3,069

Investment securities - held-to-maturity

61,435

289,194

323,306

333,503

352,756

Investment securities - available-for-sale

2,240,111

2,151,752

1,997,814

1,938,644

1,830,113

Mortgage loans held for sale

18,480

26,799

48,195

39,812

17,708

Other assets held for sale

397

1,790

5,136

14,898

24,784

Loans:

Legacy loans

8,684,550

8,430,388

8,123,274

7,133,461

6,290,383

Allowance for loan losses

(59,243

)

(56,599

)

(55,358

)

(51,732

)

(47,207

)

Loans acquired, net of discount and allowance

3,056,187

3,292,783

3,734,921

4,232,434

4,696,945

Net loans

11,681,494

11,666,572

11,802,837

11,314,163

10,940,121

Premises and equipment

333,740

295,060

287,246

288,777

289,355

Foreclosed assets and other real estate owned

18,952

25,565

22,664

30,503

29,140

Interest receivable

51,796

49,938

51,509

44,266

42,129

Bank owned life insurance

192,736

193,170

192,680

191,575

186,473

Goodwill

845,687

845,687

845,687

845,687

845,687

Other intangible assets

88,694

91,334

93,975

96,720

99,504

Other assets

62,272

68,084

92,457

80,165

76,806

Total assets

$

16,091,639

$

16,543,337

$

16,281,264

$

16,165,533

$

15,597,309

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Non-interest bearing transaction accounts

$

2,674,034

$

2,672,405

$

2,778,670

$

2,683,489

$

2,734,287

Interest bearing transaction accounts and savings deposits

6,666,823

6,830,191

6,776,330

6,916,520

6,720,754

Time deposits

2,648,674

2,896,156

2,533,506

2,353,439

2,201,874

Total deposits

11,989,531

12,398,752

12,088,506

11,953,448

11,656,915

Federal funds purchased and securities sold

under agreements to repurchase

120,213

95,792

109,213

99,801

120,909

Other borrowings

1,169,989

1,345,450

1,420,917

1,451,811

1,140,986

Subordinated notes and debentures

354,041

353,950

372,934

413,337

468,465

Other liabilities held for sale

162

162

424

1,840

2,781

Accrued interest and other liabilities

155,382

102,797

105,951

98,388

98,202

Total liabilities

13,789,318

14,296,903

14,097,945

14,018,625

13,488,258

Stockholders' equity:

Common stock

926

923

923

923

922

Surplus

1,599,566

1,597,944

1,597,261

1,594,342

1,590,086

Undivided profits

707,829

674,941

633,175

591,826

552,105

Accumulated other comprehensive loss:

Unrealized depreciation on AFS securities

(6,000

)

(27,374

)

(48,040

)

(40,183

)

(34,062

)

Total stockholders' equity

2,302,321

2,246,434

2,183,319

2,146,908

2,109,051

Total liabilities and stockholders' equity

$

16,091,639

$

16,543,337

$

16,281,264

$

16,165,533

$

15,597,309

Simmons First National Corporation

SFNC

Consolidated Statements of Income - Quarter-to-Date

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2019

2018

2018

2018

2018

($ in thousands, except per share data)

INTEREST INCOME

Loans

$

159,440

$

159,996

$

162,438

$

150,253

$

143,350

Interest bearing balances due from banks and federal funds sold

2,154

2,168

1,405

1,414

1,009

Investment securities

17,312

15,760

14,640

14,296

12,622

Mortgage loans held for sale

210

372

501

305

158

TOTAL INTEREST INCOME

179,116

178,296

178,984

166,268

157,139

INTEREST EXPENSE

Time deposits

12,320

11,273

8,017

6,175

4,842

Other deposits

18,430

17,489

16,373

12,286

10,755

Federal funds purchased and securities

sold under agreements to repurchase

136

121

104

88

110

Other borrowings

6,793

7,134

6,240

5,141

5,139

Subordinated notes and debentures

4,411

4,498

5,282

5,741

1,327

TOTAL INTEREST EXPENSE

42,090

40,515

36,016

29,431

22,173

NET INTEREST INCOME

137,026

137,781

142,968

136,837

134,966

Provision for loan losses

9,285

9,620

10,345

9,033

9,150

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

127,741

128,161

132,623

127,804

125,816

NON-INTEREST INCOME

Trust income

5,708

5,980

6,277

5,622

5,249

Service charges on deposit accounts

10,068

11,263

10,837

10,063

10,345

Other service charges and fees

1,289

1,501

1,201

2,017

2,750

Mortgage and SBA lending income

3,320

1,643

1,825

3,130

4,445

Investment banking income

618

829

664

814

834

Debit and credit card fees

6,098

6,547

6,820

10,105

8,796

Bank owned life insurance income

795

1,105

1,105

1,102

1,103

Gain (loss) on sale of securities, net

2,740

8

54

(7

)

6

Other income

3,125

5,712

4,942

5,202

4,007

TOTAL NON-INTEREST INCOME

33,761

34,588

33,725

38,048

37,535

NON-INTEREST EXPENSE

Salaries and employee benefits

56,367

49,193

55,515

55,678

56,357

Occupancy expense, net

7,475

7,016

7,713

7,921

6,960

Furniture and equipment expense

3,358

4,139

3,761

4,020

4,403

Other real estate and foreclosure expense

637

1,540

538

1,382

1,020

Deposit insurance

2,040

2,489

2,248

1,856

2,128

Merger-related costs

1,470

797

804

1,465

1,711

Other operating expenses

30,062

30,222

29,674

26,185

25,494

TOTAL NON-INTEREST EXPENSE

101,409

95,396

100,253

98,507

98,073

NET INCOME BEFORE INCOME TAXES

60,093

67,353

66,095

67,345

65,278

Provision for income taxes

12,398

11,707

10,902

13,783

13,966

NET INCOME

$

47,695

$

55,646

$

55,193

$

53,562

$

51,312

BASIC EARNINGS PER SHARE

$

0.52

$

0.60

$

0.60

$

0.58

$

0.56

DILUTED EARNINGS PER SHARE

$

0.51

$

0.60

$

0.59

$

0.58

$

0.55

Simmons First National Corporation

SFNC

Consolidated Risk-Based Capital

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2019

2018

2018

2018

2018

($ in thousands)

Tier 1 capital

Stockholders' equity

$

2,302,321

$

2,246,434

$

2,183,319

$

2,146,908

$

2,109,051

Trust preferred securities, net allowable

-

-

-

-

-

Disallowed intangible assets, net of deferred tax

(910,122

)

(912,428

)

(914,788

)

(917,050

)

(918,161

)

Unrealized loss on AFS securities

6,000

27,374

48,040

40,183

34,062

Total Tier 1 capital

1,398,199

1,361,380

1,316,571

1,270,041

1,224,952

Tier 2 capital

Qualifying unrealized gain on AFS equity securities

-

-

1

1

8

Trust preferred securities and subordinated debt

354,041

353,950

372,934

413,337

468,466

Qualifying allowance for loan losses and

reserve for unfunded commitments

67,771

63,608

63,618

60,691

54,436

Total Tier 2 capital

421,812

417,558

436,553

474,029

522,910

Total risk-based capital

$

1,820,011

$

1,778,938

$

1,753,124

$

1,744,070

$

1,747,862

Common equity

Tier 1 capital

$

1,398,199

$

1,361,380

$

1,316,571

$

1,270,041

$

1,224,952

Less: Trust preferred securities

-

-

-

-

-

Total common equity

$

1,398,199

$

1,361,380

$

1,316,571

$

1,270,041

$

1,224,952

Risk weighted assets

$

13,364,636

$

13,326,832

$

13,402,910

$

12,713,093

$

12,417,233

Adjusted average assets for leverage ratio

$

15,423,961

$

15,512,042

$

15,179,889

$

14,714,205

$

14,179,390

Ratios at end of quarter

Equity to assets

14.31

%

13.58

%

13.41

%

13.28

%

13.52

%

Tangible common equity to tangible assets (1)

9.02

%

8.39

%

8.11

%

7.91

%

7.94

%

Common equity Tier 1 ratio (CET1)

10.46

%

10.22

%

9.82

%

9.99

%

9.86

%

Tier 1 leverage ratio

9.07

%

8.78

%

8.67

%

8.63

%

8.64

%

Tier 1 risk-based capital ratio

10.46

%

10.22

%

9.82

%

9.99

%

9.86

%

Total risk-based capital ratio

13.62

%

13.35

%

13.08

%

13.72

%

14.08

%

(1) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.

Simmons First National Corporation

SFNC

Consolidated Loans and Investments

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2019

2018

2018

2018

2018

($ in thousands)

Legacy Loan Portfolio - End of Period (1)

Consumer

Credit cards

$

181,549

$

204,173

$

182,137

$

180,352

$

176,602

Other consumer

213,659

201,297

259,581

277,330

284,285

Total consumer

395,208

405,470

441,718

457,682

460,887

Real Estate

Construction

1,376,162

1,300,723

1,229,888

967,720

786,077

Single-family residential

1,431,407

1,440,443

1,401,991

1,314,787

1,193,464

Other commercial

3,355,109

3,225,287

3,077,188

2,816,420

2,611,358

Total real estate

6,162,678

5,966,453

5,709,067

5,098,927

4,590,899

Commercial

Commercial

1,801,422

1,774,909

1,608,342

1,237,910

971,704

Agricultural

147,216

164,514

218,778

187,006

128,247

Total commercial

1,948,638

1,939,423

1,827,120

1,424,916

1,099,951

Other

178,026

119,042

145,369

151,936

138,646

Total Loans

$

8,684,550

$

8,430,388

$

8,123,274

$

7,133,461

$

6,290,383

(1) Excludes all acquired loans.

Investment Securities - End of Period

Held-to-Maturity

U.S. Government agencies

$

12,996

$

16,990

$

34,983

$

36,976

$

46,961

Mortgage-backed securities

12,847

13,346

13,933

14,645

15,404

State and political subdivisions

33,597

256,863

272,396

279,787

286,901

Other securities

1,995

1,995

1,994

2,095

3,490

Total held-to-maturity

61,435

289,194

323,306

333,503

352,756

Available-for-Sale

U.S. Government agencies

$

161,577

$

154,301

$

141,460

$

145,767

$

149,804

Mortgage-backed securities

1,345,677

1,522,900

1,419,626

1,395,231

1,356,179

State and political subdivisions

580,790

314,843

282,439

245,335

185,888

FHLB stock

65,220

73,105

72,579

72,042

58,177

Other securities

86,847

86,603

81,710

80,269

80,065

Total available-for-sale

2,240,111

2,151,752

1,997,814

1,938,644

1,830,113

Total investment securities

$

2,301,546

$

2,440,946

$

2,321,120

$

2,272,147

$

2,182,869

Fair value - HTM investment securities

$

61,956

$

290,830

$

322,838

$

334,857

$

354,649

Investment Securities - QTD Average

Taxable securities

$

1,880,694

$

1,815,203

$

1,775,193

$

1,750,172

$

1,618,270

Tax exempt securities

590,941

551,185

539,135

514,838

460,675

Total investment securities - QTD average

$

2,471,635

$

2,366,388

$

2,314,328

$

2,265,010

$

2,078,945

Simmons First National Corporation

SFNC

Consolidated Loans and Credit Coverage

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2019

2018

2018

2018

2018

($ in thousands)

LOANS

Legacy loans

$

8,684,550

$

8,430,388

$

8,123,274

$

7,133,461

$

6,290,383

Allowance for loan losses (legacy loans)

(59,243

)

(56,599

)

(55,358

)

(51,732

)

(47,207

)

Legacy loans (net of allowance)

8,625,307

8,373,789

8,067,916

7,081,729

6,243,176

Loans acquired

3,099,915

3,342,175

3,790,234

4,302,760

4,776,439

Credit discount

(42,416

)

(49,297

)

(53,968

)

(68,282

)

(79,087

)

Allowance for loan losses (loans acquired)

(1,312

)

(95

)

(1,345

)

(2,044

)

(407

)

Loans acquired (net of discount and allowance)

3,056,187

3,292,783

3,734,921

4,232,434

4,696,945

Net loans

$

11,681,494

$

11,666,572

$

11,802,837

$

11,314,163

$

10,940,121

Loan Coverage Ratios

Allowance for loan losses to legacy loans

0.68

%

0.67

%

0.68

%

0.73

%

0.75

%

Discount for credit losses and allowance on loans acquired to total loans acquired plus discount for credit losses and allowance on loans acquired (non-GAAP) (1)

1.41

%

1.48

%

1.46

%

1.63

%

1.66

%

Total allowance and credit coverage (non-GAAP) (1)

0.87

%

0.90

%

0.93

%

1.07

%

1.14

%

(1) Calculations of the non-GAAP loan coverage ratios and the reconciliations to GAAP are included in the schedules accompanying this release.

Simmons First National Corporation

SFNC

Consolidated Allowance and Asset Quality

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2019

2018

2018

2018

2018

($ in thousands)

Allowance for Loan Losses (Legacy Loans)

Balance, beginning of quarter

$

56,599

$

55,358

$

51,732

$

47,207

$

41,668

Loans charged off

Credit cards

1,142

1,121

919

1,012

999

Other consumer

1,533

2,894

1,321

1,366

1,056

Real estate

374

337

4,952

161

455

Commercial

1,968

3,480

592

790

1,761

Total loans charged off

5,017

7,832

7,784

3,329

4,271

Recoveries of loans previously charged off

Credit cards

240

227

229

286

263

Other consumer

300

154

176

133

94

Real estate

142

367

210

112

302

Commercial

158

167

450

59

69

Total recoveries

840

915

1,065

590

728

Net loans charged off

4,177

6,917

6,719

2,739

3,543

Provision for loan losses

6,821

8,158

10,345

7,264

9,082

Balance, end of quarter

$

59,243

$

56,599

$

55,358

$

51,732

$

47,207

Non-performing assets (1) (2)

Non-performing loans

Nonaccrual loans

$

60,925

$

34,201

$

40,505

$

44,548

$

47,395

Loans past due 90 days or more

281

224

281

303

336

Total non-performing loans

61,206

34,425

40,786

44,851

47,731

Other non-performing assets

Foreclosed assets and other real estate owned (2)

18,952

25,565

22,664

30,503

29,140

Other non-performing assets

505

553

524

573

794

Total other non-performing assets

19,457

26,118

23,188

31,076

29,934

Total non-performing assets

$

80,663

$

60,543

$

63,974

$

75,927

$

77,665

Performing TDRs (troubled debt restructurings)

$

6,297

$

6,369

$

8,413

$

6,367

$

6,459

Ratios (1) (2)

Allowance for loan losses to total loans

0.68

%

0.67

%

0.68

%

0.73

%

0.75

%

Allowance for loan losses to non-performing loans

97

%

164

%

136

%

115

%

99

%

Non-performing loans to total loans

0.70

%

0.41

%

0.50

%

0.63

%

0.76

%

Non-performing assets (including performing TDRs)

to total assets

0.54

%

0.40

%

0.44

%

0.51

%

0.54

%

Non-performing assets to total assets

0.50

%

0.37

%

0.39

%

0.47

%

0.50

%

Annualized net charge offs to total loans

0.20

%

0.35

%

0.36

%

0.17

%

0.24

%

Annualized net credit card charge offs to

total credit card loans

1.92

%

1.86

%

1.47

%

1.60

%

1.63

%

(1) Excludes all acquired loans, except for their inclusion in total assets.